First Solar to Invest $1.2 billion to Boost American Production of Solar
2022.08.30 20:54
First Solar (FSLR) to Invest $1.2 billion to Boost American Production of Solar
By Sam Boughedda
First Solar (NASDAQ:FSLR) announced Tuesday that it plans to invest up to $1.2 billion in scaling the production of American-made solar modules.
The company said the investment is forecast to grow its ability to produce American-made solar modules for the US solar market to more than 10 gigawatts (GW) DC by 2025.
First Solar will build its fourth, “fully vertically integrated domestic factory,” with an annual capacity of 3.5 GWDC, in the US Southeast and expects to invest up to $1 billion in the new factory, which is scheduled to begin operations in 2025.
In addition, it will invest a further $185 million in expanding its Northwest Ohio manufacturing footprint by 0.9 GWDC. Elsewhere it will also invest in increasing the capacity of its two operating facilities in Perrysburg and Lake Township, Ohio, by 0.6 GWDC to 3.6 GWDC of annual Series 6 module capacity.
Furthermore, First Solar said it will expand its third Ohio factory, expected to be commissioned in the first half of 2023, to 3.5 GWDC, with the expansion increasing First Solar’s total investment in its Ohio manufacturing facilities to over $3 billion, with a cumulative annual production capacity of over 7 GWDC by 2025.
“This investment is an important step towards achieving self-sufficiency in solar technology, which, in turn, supports America’s energy security ambitions, its deployment of solar at scale, and its ability to lead with innovation,” said Mark Widmar, chief executive officer of First Solar.
Following the news, a Cowen analyst raised the price target on First Solar to $167 from $122. He explained that “given the company is largely sold out for ’23/24 excluding its India factory, investors will need to look to ’25 as this new capacity ramps.”
“We believe a capacity addition from management was largely expected as the team has been telegraphing this could happen pending the passage of the IRA bill and subsequent demand. Given the company is sold out for the next 2.5 years, this does not bring any near-term relief for customers,” added the analyst. “We anticipate two more factory announcements in the coming weeks and months that are not in our model – 1) a domestic location for manufacturing the First Solar/SunPower tandem module (HERE) and 2) a restart of the Frankfurt (Oder) facility in Eastern Germany which was closed in 2012 (HERE) or a greenfield facility in Western Europe.”
